JEDDAH, 26 November 2007 — The Saudi stock market continued to rise on the second day of trading this week. The Tadawul All-Share Index (TASI) closed 16.54 points higher at 9,649.93. The index is higher by 21.64 percent so far this week after falling over 52 percent last year.

As the stocks showed upward trend, analyst Fahd Al-Salman said the total value of stocks that were transacted on Saturday was very high. “This again reflects the strength of the Saudi stock market and its determination to make further gains,” he said and added that he expected a considerable rise in the Saudi stock index in the coming days.

Abdullah Al-Ruwaidhi, a technical analyst, said the index would soon cross the 10,000 barrier, adding that balanced growth of leading stocks was the best way to ensure the continuation of the present trend. He also noticed that the market was not disturbed currently by negative reports and declaration of new initial public offerings (IPOs).

In the banking sector, shares of Riyad Bank increased by 2.02 percent to SR75.75 and Samba Financial Group by 1.66 percent to SR152.50.

Saudi Hollandi Bank (SHB) shares edged higher slightly to close at SR56.25 despite the Kuwait-based Global Investment House (Global) downgraded SHB to “hold” from “buy” on the stock. At the current market price, SHB’s share is quoting at a premium of 5.9 percent to its fair value, the report said.

The stock market decline in 2006, coupled with stringent conditions on the financial markets in Saudi Arabia, have evidently affected SHB’s net income which declined by 10.6 percent from its 2005 level.

Based on the market price of SR54.00, the Global report said, SHB stock is trading at 12.5x of its 2006 earnings and 2.8x of its book value. On a year forward basis, the stock is trading at 18.1x 2007F earnings and 3.0x 2007F book value.

The combination of the revised projections and the revised cost of equity have led to a value of SR44.7 per share, which is 17.3 percent lower as compared to the current market price. Based on a forward P/BV multiple of 4.13x 2007 projected book value for the Saudi banking sector, the peer valuation method results in a valuation of SR75.4 per share. Assigning an 80 percent weight to the DDM value, and a 20 percent weight to the relative value, the weighted average share value of SHB came out to SR50.8 per share.

The industrial index declined 1.14 percent to 24,123.19 yesterday as shares of the bellwether Saudi Basic Industries Corp. (SABIC) dropped 1.19 percent to close at SR164.75.

In the telecom sector, shares of Saudi Telecom Co. (STC) and Etihad Etisalat increased by 3.65 percent to SR78 and 1.37 percent to SR73.75, respectively.

The cement sector was also in positive territory yesterday. Shares of Arab Cement jumped 5.59 percent to SR103.75 and Tabuk Cement by 4.82 percent to SR38.

In the insurance sector, the only gainers yesterday were Malath Cooperative Insurance and Reinsurance Co., Arabian Shield Cooperative Insurance Co., Saudi Arabian Cooperative Insurance Co. and Gulf Union Cooperative Insurance Co. while shares of other companies were in the red.

Jazan Development shares increased 0.91 percent to SR27.50 while shares of seven companies declined and one was unchanged in the agriculture sector.

The stock market turnover was over SR10.52 billion yesterday

BMG Saudi Index Turnover Dips

The BMG Saudi Index could not maintain the upward trend that began with last Monday’s trading session, as it witnessed a decline in yesterday’s session by 1.24 percent to 525.25 points. The market turnover also went down by 25.9 percent from Saturday’s turnover to reach SR3.43 billion ($923 million) versus SR4.63 billion ($1.25 billion).

As for the performance, the only sector that ended the session on a positive note was the insurance sector, with a marginal 0.03 percent increase. The services sector fell by 0.21 percent, while the agricultural sector and the industrial sectors dipped by 1.13 percent and 1.35 percent, respectively.

Only 9 stocks witnessed gains, while 21 stocks moved down. The best performing stock was Al-Baha for Investment and Development Company, with a 3.6 percent rise to SR43.5, whereas the worst performer was Hail Agriculture, which fell by 3.13 percent to close at SR38.75 per share.